The Price of Beer
Today's blog entry is intended to test your mathematical skills. Send your answers to us as comments. The first person to send us the correct answers will be eulogized in my next blog entry. Good luck!
Problem 1
For .6o Euros I can buy a half litter bottle of Krombacher's, a good local Pilsner. Krombachers is similar to more famous German imports like Warsteiner or Becks, though I prefer it to either. In Indiana, Dolores and I would occasionally splurge for a six pack of Old Style. For those of who aren't from the Midwest or who do not have refined taste in beers, Old Style is a Wisconsin beer that is allegedly drunk in great quantities at Wriggly Field. A six pack of this fine brew will set you back $3.50. Incidentally, we once invited some friends over for a blind taste test between Old Style and PBR, and as Dolores and I expected, Old Style carried the day. One recommendation: put the Old Style in the freezer for about twenty minutes before drinking it. It should be served very cold.
So, here's the question: which is more expensive, Krombacher's or Old Style? What would the exchange rate between Euro's and Dollars have to be for both beers to cost the same price?
Question 2
In 2005 Rick Santorum (R-PA), eleven brave Republicans, and one lone Democrat tried to repeal the $18 per barrel federal tax on beer. The bill never reached a vote, but at least now we know who really has the people's interests at heart. State taxes on beer vary from state to state. Alaska has the highest tax, at $1.07 for gallon. In Wyoming you pay the lowest state taxes, only $.02 per gallon. (I suspect some kind of collusion between Dick Cheney and Haliburton.) In Indiana the state tax is $.115.
The Question: when I pay $3.50 for a six pack of Old Style in the State of Indiana, how much of my money goes to the government (ignore sales tax). Hint: a barrel of beer contains 31 gallons. If Santorum's bill had passed, would Old Style in Alaska be cheaper than Krombacher in Jena.
Extra Credit
Does the 7% or 16% VAT tax apply to beer in Germany?
Extra Extra Credit
Why is German beer so cheap? Conversely, why is American beer so expensive? Does Haliburton have anything to do with the high prices consumers are paying at the package store?
Here is a picture of some sheep. Seven out of ten sheep prefer Krombacher to Old Style.
Today's blog entry is intended to test your mathematical skills. Send your answers to us as comments. The first person to send us the correct answers will be eulogized in my next blog entry. Good luck!
Problem 1
For .6o Euros I can buy a half litter bottle of Krombacher's, a good local Pilsner. Krombachers is similar to more famous German imports like Warsteiner or Becks, though I prefer it to either. In Indiana, Dolores and I would occasionally splurge for a six pack of Old Style. For those of who aren't from the Midwest or who do not have refined taste in beers, Old Style is a Wisconsin beer that is allegedly drunk in great quantities at Wriggly Field. A six pack of this fine brew will set you back $3.50. Incidentally, we once invited some friends over for a blind taste test between Old Style and PBR, and as Dolores and I expected, Old Style carried the day. One recommendation: put the Old Style in the freezer for about twenty minutes before drinking it. It should be served very cold.
So, here's the question: which is more expensive, Krombacher's or Old Style? What would the exchange rate between Euro's and Dollars have to be for both beers to cost the same price?
Question 2
In 2005 Rick Santorum (R-PA), eleven brave Republicans, and one lone Democrat tried to repeal the $18 per barrel federal tax on beer. The bill never reached a vote, but at least now we know who really has the people's interests at heart. State taxes on beer vary from state to state. Alaska has the highest tax, at $1.07 for gallon. In Wyoming you pay the lowest state taxes, only $.02 per gallon. (I suspect some kind of collusion between Dick Cheney and Haliburton.) In Indiana the state tax is $.115.
The Question: when I pay $3.50 for a six pack of Old Style in the State of Indiana, how much of my money goes to the government (ignore sales tax). Hint: a barrel of beer contains 31 gallons. If Santorum's bill had passed, would Old Style in Alaska be cheaper than Krombacher in Jena.
Extra Credit
Does the 7% or 16% VAT tax apply to beer in Germany?
Extra Extra Credit
Why is German beer so cheap? Conversely, why is American beer so expensive? Does Haliburton have anything to do with the high prices consumers are paying at the package store?
Here is a picture of some sheep. Seven out of ten sheep prefer Krombacher to Old Style.
2 comments:
Well it looks like I got my answers in under the wire. However, I must say some of the questions are not posed with sufficient detail. I managed to get past this, and present my findings below.
Question 1: The problem is really a simple problem of quantitative analysis. We simply need to calculate the price/ vol. of both beverages. I chose to convert all into eur./L
Krombachers:
.60 eur./.5 L = 1.2 eur./L
Old Style:
Assuming the six pack contains 6, standard 12 oz. cans (Source Wiki)
each 6-pack contains 72 oz. of beer.
72 oz. x (1 L./33.814022702 oz.)
=2.1292941 L/ 6-pack.
So, 3.50$/2.1292941 L =
1.6431924 $/L
Based on the most current currency conversion rate from XE.com,
1 eur./1.42125 $
So,
1.6431924 $/L x (1 eur./ 1.42125 $)=1.15616 eur/L
So, by my calculations Old Style is actually 0.04384 eur./ L cheaper.
To determine the exchange rate that would make the cost equal,
1.6431924 $/L x (1 eur./ x $)=1.2 eur/L.
ignorning units for ease of algebra
1.6431924/x = 1.2
1.6431924 = 1.2x
x=1.3693268 so,
at the rate of 1 Eur./1.3693268$ Old Style would cost 1.2 eur./ L
Question 2: There is a problem here. According to Wiki a barrel does not equal 31 gal. but 31.5 gal. I have taken this into account in the following calculations.
If the state tax on beer is .115$/gal. in IN,
.115$/gal. x (31.5 gal./ barell)=
4.725$/barrell x (barell/4032 oz)=
0.0011718$/oz. x (72oz./6-pack) =
0.0843696 $/6-Pack =State IN
We now have to calculate the Federal Tax on the 6-pack,
18$/Barell x (barell/31.5 gal.) =
0.5714285 $/gal. x (0.0078125 gal./oz.) = 0.0044642 $/oz.
x (72 oz./ 6-pack) = 0.3214224 $/6-pack = Federal Tax
The total tax/6-pack=State IN + Federal = 0.405792 $/6-pack.
Considering the tax in Alaska, 1.07 $/gal. x (31.5 gal./ barrel)=
33.705 $/ barrell x (barrel/ 4032 oz.) = .0083593 $/oz. x (72 oz./6-pack)= 0.6018696 $/6-pack = State AK
This means that a 6-pack of Old Style costs 4.0175 $ in Alaska. This assumes that the per-unit cost and Federal Tax remain constant.
So, the cost in eur./L of Old Style AK is
4.0175$/6-pack x (6-pack/ 2.1292941 L.) = 1.8867755 $/L
x (1 eur/ 1.42125 $) =
1.3271065 eur./L.
Now if the repeal of Federal Tax had succeded, then the cost of Old Style AK would be
4.0175 - 0.3214224 = 3.6960776 $/ 6-pack, assuming state tax and unit costs remain constant. So,
3.6960776 $/ 6-pack x (6-pack/ 2.1292941 L) = 1.7358229 $/L
x (1 eur./ 1.42125 $) =
1.2213353 eur./L. = Old Style AK.
So, no Old Style in Alaska would cost 0.0213353 $/L more in AK than in Jena.
Extra Credit: According to europeanbeerguide.net (and a more reputable source I could not hope for), the VAT on beer in Germany is 16%.
Extra Extra Credit: Here I am compelled by the force of my mathematical reasoning to object to the form of the question. Since my calculations show that Old Style in Indiana is actually, 0.04384 eur./L, or 0.0623076 $/L. cheaper, the question is badly posed. However, this just demonstrates the resistance of the people of the state of Indiana to the nefarious influence of Haliburton, which is so evident in states like Alaska.
P.S. Although I believe the calculations above are correct, I should point out that I am a Humanist. So, there may be good reason to suppose that I can't add 2+2, let alone convert currency. If the calculations are faulty, then at least I avoided dissertation writing for a while.
P.P.S As a counter-challenge, I am not going to reveal my true identity. Mike will have to guess, and if he does (or reveals that I have made some elementary math mistake) all the Old Style/ Krombacher he can drink is on me next time we meet. If he identifies my pseudonym, I'll let him choose any beer he likes.
You owe me some Krombacher, Rusty Shackelford. Guess your going to visit Jena.
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